Richmond, Va. Circuit City Stores announced on Monday that it is closing 155 of its more than 700 stores, or about 20% of its portfolio, citing its deteriorating liquidity position and the continued weak macroeconomic environment.
"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors," James A. Marcum, vice chairman and acting president and CEO said in a statement. "The combination of these trends has strained severely our working capital and liquidity."
The closings, which will take place in 55 markets, are scheduled to be completed by Dec. 31. Circuit City said the stores earmarked for closing are either underperforming or no longer a strategic fit for the company. About 17% of its domestic work force will be laid off in the process.
Circuit City also said it will further reduce new store openings and plans to work with landlords to renegotiate leases, lower rent or terminate agreements.
The company said it expects the stores it is shuttering, which generated about $1.4 billion in net sales in fiscal 2008, will not open on Tuesday and store-closing sales will begin on Wednesday.
Circuit City has had only one profitable quarter in the past year, posting a wider second-quarter loss in September with a 13% drop in same-store sales. Its results have weakened as the company faces significant declines in traffic, heightened competition from rival Best Buy Co. and others and a weakened brand position.
The company said last week that the New York Stock Exchange has warned it that its stock price is not high enough for continued listing.